Profit-taking trips indices to two-month lows

Volatile markets slumped in late noon trade to end Sensex and Nifty down 2 per cent each.

With this, equity benchmarks crashed for second consecutive week, led by fall almost in all sectors — the Nifty shed more than 420 points in two weeks to settle below 5,900 — another psychologically important level and Sensex dropped over 1,400 points. Also, both the Sensex and the 50-unit S&P CNX Nifty settled at two-month closing lows on Friday. 

Year-end profit taking by foreign funds may continue to weigh on the domestic bourses in the near term as the market has come off soon after hitting a record closing high early this month. Funds based in US and Europe follow calendar year as their accounting year. Since many stocks have logged decent to strong gains this calendar year may have encouraged many FIIs to go in profit taking, maintain analysts.

Intraday volatility was high as traders rolled over positions in the derivatives segment from the near-month November 2010 series to December 2010 ahead of the expiry of the November 2010 contracts on Thursday, November 25, 2010.  The market slipped into the red after a firm start as Chinese stocks fell on rate-hike worries. It trimmed losses after hitting a fresh intraday low in morning trade, while key benchmark recovered after hitting fresh intraday lows in mid-morning trade.

The intraday recovery gathered steam in early afternoon trade as Chinese stocks and US index futures came off lows,  Weakness prevailed in mid-afternoon trade and the market extended losses in late trade.

Sensex at BSE was down 345.20 points or 1.73 per cent to close at 19,585.44 points, which is its lowest closing since September 16, 2010. It rose 52.11 points at the day's high and lost 425.77 points at the day's low in late trade.  The 50-unit S&P CNX Nifty at NSE was down 108.50 points or 1.81 per cent to settle at 5,890.30 in the day's closing, which is its lowest closing since September 17, 2010.

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